With cabling and wires being a necessary component across industries, the industry is expected to generate $113.9 billion by the year 2015.
The wire and cables industry has moved from being a small industry two decades back to an industry where one can find the maximum employment opportunities. With the industry gradually shedding its image of being part of the unorganised sector, requirements like brand and quality perception are key in this Rs 15,000 crore industry.
The wire and cables industry predominantly provides challenging opportunities in the field of manufacturing, supply chain, procurement, marketing and most importantly human resources. This industry is currently undergoing a major change and portends huge opportunity for upcoming professionals and will give them a first hand experience on subjects like techno-marketing, brand building, Six-Sigma, just-in-time manufacturing, etc.
The wire and cables industry comprises 40 per cent of the entire electrical industry, which is expected to double in size over the next five years. The industry is growing at a compounded average growth rate (CAGR) of 15-18 per cent as a result of growth in the power and infrastructure segments. It is expected to grow at a similar rate for the next five years. The government's emphasis on the power sector reforms and infrastructure will further drive growth.
Dig in deep
The main growth driver for the industry is the rising investment in transmission and distribution (T&D) infrastructure. With rapid urbanisation, the overhead power lines for power transmission need to be replaced with underground cabling systems to deal with space crunch. However, the Indian power sector is making significant efforts in this area. The overhead cables are going to be diminished with reasonable speed as urbanisation is taking place across the country with a good speed.
Industry experts say that probably by 2020, about 50 per cent of overhead lines will be replaced by underground cables in the high tension segment.
In addition, with upcoming projects like National Optical Fibre Network (NOFN), it´s expected that its implementing agency, Power Grid Corporation, is likely to float tenders worth more than Rs 800 crore for laying optical fibre cables (OFC) through Andhra Pradesh, Odisha and Jharkhand. The facilitating agency, Bharat Broadband Network Ltd (BBNL), has already received right of way (RoW) from the Andhra Pradesh government for laying OFC alongside the road. The RoW enables PGCIL (a stakeholder in this project) for laying cables along roads under possession of the roads and buildings department, Panchayat Raj, municipal administ¡ration and urban development, energy and forest departments.
The NOFN project by BBNL, a special purpose vehicle (SPV) comprising three public sector entities (Bharat Sanchar Nigam Ltd, PGCIL and Railtel), has a huge task to connect as many as 250,000 gram panchayats (GPs) in the country. "It is a huge task to connect so many panchayats, that too through OFCs," says IS Jha, Director-Projects, PGCIL.
In Phase-I, Power Grid will connect about 15,000 GPs in 630 blocks or 43 districts across four States at an estimated cost of Rs 828 crore (excluding cost of BBNL supplied material).
Types of underground cables include paper insulated lead covered (PILC) cables, poly vinyl chloride (PVC) cables, polyethylene (PE) cables, ethylene propylene rubber (EPR) cables and cross linked polyethylene (XLPE) cables.
The government of India has a key objective in providing power for all. In addition, with the economy striving for developing a robust and stable infrastructure and customers increasingly demanding high-quality and branded wires, the potential demand outlook for cables looks positive which would further drive growth for the manufacturers.
Twinkle Gosar, Senior Analyst, Angel Broking, who tracks the power sector, says that the wire and cables industry will eventually focus on supplying cables for specific applications pertaining to industry needs. ´India has a lot of potential in the mining, power, oil & gas, Metro railways, cement industry, steel industry and other sectors,´ adds the analyst.
The specific need from various sectors has eventually forced cable and wire manufactures to cater to needs like extra high voltage cables, elastomer cables, etc. These products are now being used for special applications in the mining/oil sector, shipbuilding /crane cables/elevator cables, cables for solar power plants, to harness power for new generation motor vehicles, windmill solutions, security systems and other types of data cables.
While the cabling industry has gradually moved from the unorganised to organised segment, unorganised players still continue to hold 35 per cent of the market in India. This poses a challenge to identify quality cables. Therefore, it is important to educate the stakeholders about importance of certifications from ISI and BIS. In an earlier interview, Richard Lee, CEO, Asia Pacific at Lapp Group told this magazine that initiatives such as seminars on the ill-effects of inappropriate cabling and submission of educative write-ups in technical journals, and conducting workshops for designers, consultants and users are highly effective in propagating safe-connectivity solutions.
In the global cable market, there is a higher usage of multi-core cables and halogen-free flame retardant (HFFR) cables. India, on the other hand, has fewer people using the flame retardant PVC (FR PVC cables). Hence, educating people on the importance of halogen-free cables is needed.
Most of the cables and wires manufacturers are asking for a fair playing field, and want encouragement of local industry in terms of increasing the special import duty on Chinese products (as Chinese manufacturers have access to lower cost raw materials and duties resulting in their products being brought in at much lower prices) or giving preference of price for local players in tenders against international companies as is the case in many countries. Says Madhav Digraskar, Managing Director & CEO, Cable Corporation of India, ´The steel industry as well as the power equipment industry in India is facing a major challenge in terms of Chinese competition and same will be true for the EHV cable industry.´
The industry, apart from grappling with a copper wire price war, is battling with the low level of awareness among the consumers about quality energy saving products and multiplicity of cheaper unbranded versions available in the market. Internationally, most countries adopt variable pricing policies where certain volatilities in prices of raw materials get adjusted in the prices of the finished products. But in India, in most cases the manufacturers operate on fixed prices so the varying prices of raw materials hit the manufacturers directly for the period from offer to order to supply. Once the Indian market accepts the price variation clause, certainly risk will be mitigated to a certain extent for the manufacturer.
This field requires and teaches freshers and professionals to be techno-commercially inclined. Ideally, required personnel should be electrical/mechanical engineers for manufacturing, electrical engineers for EPC related sales for special applications, managers with operations knowledge for implementation of world class manufacturing techniques, managers with knowledge of creative/application based marketing, MBAs who can use various strengths of companies and make use of adjacent opportunities, as well as fresh graduates who have the zeal to outperform and change customer outlook. The sector also provides tremendous entrepreneurial opportunities in trading, contracting and manufacturing.
´We believe that with development and urbanisation, the wires and cables industry in India is growing. The market is also evolving with new construction methods and design sensibilities. There is definitely space for new and upcoming professionals in this sector,´ says Lee.
India is a growing market for real estate and infrastructure and there is a lot of investment in this sector. With this market growing, the demand for wires and cables will also grow. Any new project assures an increase in the market size for the wires and cables industry even if the investment is low.
I wish to start pvc / pp electric wire unit in Delhi. What kind of information I can get if I subscribe for your magazine
Pls invite me all auction in gujarat
we are doing business developing for solar power ,thermal power , customer supporting and we have 45 mw splar power on hand needs investors.....
pls call +910842559230